Copper climbs 2.1%; silver gains, but holds below $24 an ounce

SAN FRANCISCO (MarketWatch) — Gold futures climbed Wednesday, recouping the prior day’s loss and then some to finish at their highest level in nearly a month, with the metal finding support from weakness in the U.S. dollar and strong demand in Asia.

Bloomberg News

Gold for June delivery
US:GCM3
climbed $24.90, or 1.7%, to settle at $1,473.70 on the Comex division of the New York Mercantile Exchange. That was the highest settlement for a most-active contract since April 12, according to FactSet data.

On Tuesday, prices for the precious metal fell $19.20, or 1.3%, as data suggested commodity exchange-traded funds in April logged a record month of withdrawals.

In the West, “investor sentiment towards gold seems lukewarm at best among professional money managers right now,” he said. However, “demand in Asia is holding up.”

On the Shanghai Gold Exchange, the last two days of trading have seen more than 20 metric tons of the most popular “four nines” spot gold contract — for gold of 99.99% purity — traded, according to Traynor.

For comparison, back on Feb. 18, the first day back after Lunar New Year, the exchange saw 22 metric tons traded in that contract, he said, adding that at the time, it was a record, though that record was “smashed” last month.

Gold’s gains also followed Chinese trade data, which showed a swing to a surplus in April after a small deficit in March.

Gold’s climb makes sense “when you consider that China’s imports of the yellow metal from Hong Kong surged to 223.52 [metric] tons in March from 97.11 [metric] tons in February, as physical buyers rushed to capitalize on ‘cheap’ prices,” said Fawad Razaqzada, technical analyst at GFT Markets.

Aiding gold’s price rise Wednesday, the dollar
DXY, +0.04%lost ground against most major currencies. Commodities priced in dollars, including gold, tend to trade inversely with the dollar, as moves in the U.S. unit can influence the attractiveness of metals to holders of other currencies.

‘Wait and watch’

In the gold market, “bears seem to be running out of steam,” said Chintan Karnani, an independent bullion analyst based in New Delhi.

On a technical level, if gold is able to trade over $1,436 an ounce over the next three trading sessions, starting Thursday, then prices may rise to $1,520-plus, he said. Still, Karnani said he’d “prefer to wait and watch and not get too optimistic in gold.”

China’s public snub of North Korea

(4:27)

China has signaled a frostier approach to North Korea, with the Bank of China cutting ties with Pyongyang’s primary foreign-exchange bank. The WSJ’s Lingling Wei tells Deborah Kan why Beijing is finally distancing itself from its unruly neighbor.

Outflows from ETFs were among the factors analysts had cited as being behind a slide in gold prices last month, though reports of stronger demand for physical gold had recently helped them come off their lows.

Data suggest that outflows from commodity ETFs reached a record, totaling $7.8 billion, including about $7.3 billion of net redemptions in the largest physical gold ETFs — the SPDR Gold Trust
GLD, +0.63%
and iShares Gold Trust
IAU, +0.67%
— according to a note from Citi Research earlier this week.

Silver, meanwhile, rebounded from its lows to finish higher. The metal for July delivery
US:SIN3
closed up 12 cents, or 0.5%, at $23.93 an ounce.

Silver’s rebound came as the dollar index edged closer to intraday lows. It also followed the stronger-than-expected Chinese trade figures.

“As well as a precious metal, silver has many industrial uses. So, when exports rise, so too should the demand for commodities and, therefore, silver, which falls into that category,” said Razaqzada, who was surprised to see silver prices fall during the session.

Rounding out action on Comex, copper for July delivery
US:HGN3
closed up 7 cents, or 2.1%, to $3.37 a pound.

In a recent note to clients, Goldman Sachs analysts said they remained near-term bullish on the copper price outlook, “based on an expectation of continued declines in overall inventories and an expected improvement in sentiment toward Chinese demand.”

After losses on Tuesday, July platinum
US:PLN3
gained $23.70, or 1.6%, to $1,504.90 an ounce, and June palladium
US:PAM3
added $17.65, or 2.6%, to end at $698.25 an ounce.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.